Pared-Down 401(k)s May be Disservice to Investors

Although some employers, including General Motors and Delphi, have caved into pressure to pare down the number of options in their 401(k) plans to boost participation levels, often replacing a menu of choices with target-date funds, that may be a disservice to sophisticated investors, The Wall Street Journal reports.

In fact, in doing so, they may be impairing participants’ ability to properly diversify, as pension plans traditionally do.